A quick recap of what happened overnight.
> Trade war: Trump announced a trade agreement with the UK [link], but indicated that a final deal has not yet been made since “the final details are being written up”, adding, “in the final weeks we’ll have it all very conclusive.” Prior to the trade war, the UK’s average tariff charged to countries around the world was 1%, and the average tariff applied to US imports was 0.5%. Oh, and the US had a trade surplus with the UK. #MissionAccomplished.
> Pope war: White smoke means a new pope has been chosen, and the new pope is the Cardinal from Chicago, Robert Prevost. He will be known as Leo XIV. The prediction markets had swung heavily in favor of Pietro Parolin, but that just underlines that a 60% chance isn’t a 100% chance.
> DOWN: The trade deal announcement appears to have dulled gold’s “flight to safety” pump.
> UP: This is a risk-on day, with the Dow up 600 points (as of this writing) and Bitcoin up 5%.
MB BOTTOM-LINE: The Trump administration needed an easy win, and it looks like they got it with a country that has been willing to “just play along” since the US invasion of Iraq back in 2003. This deal is the definition of the phrase, “The juice isn’t worth the squeeze.” More importantly, there doesn’t seem to be much of a theme to the collection of concessions that other countries could adopt in their own negotiations. Are we going to get a slow dribble of bespoke agreements that barely change anything just to create a signature photo-op? That’s a dark timeline.
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